Canada runs C$23.7 billion budget deficit over 5 months

Fri Oct 23, 2009 9:21pm EDT
 
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OTTAWA (Reuters) - Economic weakness and subsequent stimulus plans pushed Canada's federal budget deficit to C$5.34 billion ($5.09 billion) in August from C$1.86 billion a year earlier, the Finance Department said on Friday.

For the first five months of the fiscal year, the deficit was C$23.68 billion, compared with a surplus of C$1.09 billion in the corresponding period of 2008.

"The August 2009 deficit reflects the impact of the weaker economy on the government's finances, as well as measures introduced under Canada's Economic Action Plan," the Finance Department said in a statement.

For the period from April to August, roughly C$11 billion of the C$23.68 billion deficit was attributable to the stimulus package, the department said. The plan has included tax cuts, enhanced jobless benefits and a bailout for the car industry.

The government projects that the deficit for this fiscal year will hit C$55.9 billion.

(Reporting by Randall Palmer; editing by Peter Galloway)